Ripple received preliminary CASP (Crypto Asset Service Provider) approval from Luxembourg's financial regulator CSSF in the form of a "green light letter" on June 23. However, the "green light letter" is a conditional commitment rather than a formal license: CSSF requires Ripple's Luxembourg entity to prove item by item that it has genuine employees, own funds, etc.; ESMA states that Ripple's issuance of the RLUSD stablecoin is a higher-risk combination.
Conditional Nature of the CSSF Green Light Letter and the Luxembourg Review Conditions Ripple Still Needs to Pass
Under MiCA regulations and ESMA guidance, the "green light letter" indicates that CSSF approves the applicant in principle, but the attached conditions constitute a final verification stage. Ripple still needs to meet the following conditions item by item:
Service Category Application: Specify the specific service items applied for under MiCA Article 62 (transfer, custody, exchange licenses each differ)
Three-Year Business Plan: Submit a business plan simulation covering both stress and success scenarios
Capital Test: The Luxembourg local entity must hold own funds or purchase insurance for the services provided; Ripple Group's balance sheet cannot substitute
Governance Requirements: Establish management with genuine decision-making power, the CEO must invest sufficient time, and restrict the repatriation of funds to the parent company
Operational Evidence: Background checks on management and major shareholders, a clearly mapped control structure, a plan to isolate RLUSD from own funds, and wallet security and key handling procedures
Compliance Challenges Amplified by the RLUSD Stablecoin and ESMA's High-Risk Combination Classification
RLUSD's circulating supply is approximately $1.6 billion, classified as a "electronic money token" under MiCA. The European Banking Authority's ruling confirms that transferring or holding stablecoins constitutes a payment service, requiring companies to obtain a payment license in addition to the MiCA CASP license; the grace period for this regulation ended on March 2, 2026.
Ripple already holds a Luxembourg EMI license, and on this basis has obtained preliminary CASP approval. The dual-license combination gives it the basic conditions to simultaneously handle cash and cryptocurrencies. ESMA also points out that simultaneously issuing a stablecoin and providing related services is a higher-risk business combination, and CSSF will closely monitor how Ripple establishes a clear segregation mechanism between the two roles.
XRP Market Price Reaction to the CSSF Green Light Letter Announcement
According to CryptoSlate, XRP traded around $1.10 on June 25 after the news, largely unaffected.
Frequently Asked Questions
What is the specific difference between MiCA's "green light letter" and a formal CASP license?
The "green light letter" is CSSF's conditional commitment to approve the applicant in principle, indicating that the regulator believes the applicant meets MiCA requirements in principle but has not yet passed a comprehensive review. The formal CASP license will only be issued after Ripple's Luxembourg entity meets CSSF's listed conditions item by item and CSSF completes the final verification.
How do Ripple's EMI license and preliminary CASP approval work together?
The EMI license covers electronic money and stablecoin-related services, while the preliminary CASP approval covers crypto asset services. Together, they enable Ripple to offer regulated integrated solutions for European banks to handle both cash and cryptocurrencies, valid across the 30 member states of the European Economic Area under the MiCA framework.
Why is CSSF particularly concerned about Ripple simultaneously issuing RLUSD and providing related services?
Under ESMA guidance, a company simultaneously issuing a stablecoin and providing related crypto asset services is considered a higher-risk business combination because the two roles may create conflicts of interest. ESMA requires CSSF to closely scrutinize how Ripple establishes clear fund and business segregation mechanisms between the two roles. The grace period for the above regulation ended on March 2, 2026, and took effect.
